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BACKGROUND

Incorporated in 2006, GNG Electronics Ltd (GEL) operates under the brand “Electronics Bazaar” and is India’s largest refurbisher of laptops and desktops and ranks among the largest refurbishes of ICT devices globally. With a strong presence across India, the USA, Europe, Africa, and the UAE, the Co operates across the full refurbishment value chain from sourcing and refurbishment to sales, after sale services, and warranty support. GNG addresses the growing demand for affordable, reliable, and premium ICT devices that match new products in both functionality and aesthetics, while offering customers the added assurance of proven warranty coverage. In addition to its core refurbishment business, Co also offers customized solutions, IT asset disposition, e-waste management, and buyback programs for refurbished devices. GEL has a broad portfolio of 5,840 SKUs, in-house repair capabilities and ~ 557 procurement partners.

Objects and Details of the Issue: GEL issue is a combination of fresh issue of 1.69 cr shares aggregating to Rs 400 cr and offer for sale of 0.26 cr shares aggregating to Rs 60.44 cr totalling to Rs.460.43cr. The proceeds will be utilised to payback debt and for general corporate expenses.

Investment Rationale:

* Largest Player in the refurbisher of laptops and desktops market in India and overall ICT devices globally.

* Well positioned to harness global shift to sustainability and growing focus on ESG.

* Track record of profitability and consistent financial performance.

Valuation and Recommendation:-

Global refurbished personal market is growing at a CAGR of 18.9% backed by sustainability and affordability. GNG has emerged as India’s largest ICT refurbisher with a fast growing global footprint spanning 38 countries. With strong partnerships of ~ 557 procurement partners and a broad portfolio of 5840 SKUs, GNG appears structurally positioned to capture long term value creation from both ESG-led and affordability driven global IT demand. Revenues/ EBIDTA has grown at a CAGR of 46%/59.5% during FY23-25. At higher price band of Rs 237, the issue is priced at a P/E of 39 x FY25 EPS which looks fairly priced considering higher growth expected, repayment of loan from IPO proceeds and ROE of 30%. Hence, we recommend ‘Subscribe’ to the issue.

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SEBI Registration number is INH00000176